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This chart signal could mean it’s time for the bears to pounce

Don’t short stocks until this happens: Technical analyst
Don’t short stocks until this happens: Technical analyst

Until the S&P 500 loses its momentum, traders shouldn't even think about taking bearish positions, according to MKM Partners chief market technician Jonathan Krinsky.

"One thing that's kept us constructively bullish since, really, the election is just looking at a simple trend measure such as the 20-day moving average," Krinsky said Monday on CNBC's "Trading Nation."

Krinsky points out that in the past four months, the has not experienced consecutive closes below its own 20-day moving average, a technical indicator tracks the market's average closing price over the prior 20 sessions.

The technical analyst wrote in a recent note that the moving average has "acted as very strong support," and that "if you want to get bearish on the tape, we would at least wait for consecutive closes below the 20 DMA."

He added that consecutive closes below the moving average "would be your first sign that, at least on a short-term perspective, maybe the momentum is slowing."

In other words, Krinsky believes that if stocks slide a little, they could slide more. This is a common thesis among technical analysts, who tend to put a great deal of weight on trader psychology and market momentum, and thus frequently advocate drifting along with the crowd rather than going contrarian.

To be clear, two closes below the 20-day average would not turn Krinsky turning doomsday prognosticator: "It would take a lot more than that for us to get outright bearish, or think that we're entering anything more than a correction," he said.

Below the 20-day moving average, which currently sits at 2,364, Krinsky sees secondary support where the 50-day moving average hits, at about 2,313.

S&P Global equity chief investment officer Erin Gibbs agrees, though she generally uses earnings signals rather than the charts to make her macro market calls. "I wouldn't put on bearish trades on the S&P 500 until there is some sign of momentum weakness, or some indication of increasing fear or risk off in the markets," she said.

"It's hard to be very bearish when we're consistently seeing profit growth this year," Gibbs said Monday on "Trading Nation."